Microsoft's 'try before you buy' blockchain cloud with Ethereum lining

A while ago Ethereum's chief technology officer Gavin Wood said in an interview that maybe some large IT companies could use Ethereum as a marketing tool. Perhaps he was thinking about Microsoft which is now offering Blockchain as a service on the Azure cloud, in conjunction with ConsenSys, a provider of Ethereum applications.

Microsoft is not the same company it was a couple of years ago. You could say it is going through a process of integration: a strategy to keep pace with what's happening while ensuring the competition can work in tandem with its own technology. Azure now lets businesses run their software on Linux as well as Windows and it recently partnered with Docker to extend the latter's "container" technology to Windows.

Ethereum's DevCon attendees may have been surprised to see Marley Gray, Microsoft's director of technology strategy for financial services, running Ubuntu on Azure and referring to it as "the thing I've been using most lately".

Broadly speaking, a momentous shift towards decentralisation is not an intuitive match for any company that behaves in an insular manner. But big change happens by degree, and in any case private blockchains are chimerical data beasts that probably straddle all possible worlds. IBTimes asked Microsoft if it sensed incommensurability of any kind with the emerging blockchain paradigm.

"What is a cloud?" answered Gray, referring to decentralisation in general. "There is room for all sorts of models. Decentralisation works in different types of compositions and frameworks. In terms of how you decompose things, we see decentralisation and these applications and end points being very important. Computation at the edge is very important for a lot of different things.

"But there are certain workloads where you really need scale and you need it in a distribution. You have regulatory issues you have to address, security you have to address.

"So we think that there's a good match between cloud and distributed computing. You get the best of both worlds: you get that decentralised sort of ecosystem where it can reside in the cloud, and on a hyper-scale it can be around the world.

"It's really a win win win for everyone: startups can focus on a value added service on top of blockchains; put it on a marketplace where it is discoverable; and our enterprise customers that are already using our enterprise cloud offerings can discover them, try them out - try before you buy - and build symbiotic relationships.

"But it doesn't have to be running in Azure. It can be connected to Azure; Azure could be just one connection point within that blockchain. So you could maybe use it for additional services, a risk service for example, or something else that you are plugging in to your distributed application."

Gray pointed out Microsoft's competitors like Amazon and Google don't really have that model. "You build it up there - it stays up there. With us, you can build it up there and you can say, I need to bring this in house, and that's fine."

Oracle, which now also has a connective presence on Azure, has been silent so far about the blockchain. Gray said: "They have Java and Java is a very powerful platform and a lot of people develop solutions on it, and there's a Java application from Ether.Camp.

"Oracle could very well create services that could take some of their existing assets - and by the way the Oracle assets are running in Azure - so I think there is enough room for everybody: big IT, little IT."

Gray explained that Microsoft's Azure customers began asking about blockchain during the summer and the partnership with ConsenSys followed from that. "We found the ecosystem for Ethereum specifically was very daunting to get started. The tools were rough, it's not enterprise grade. It was hard to attract people and to scale, to be able to work with it.

"So we set out upon making it easier for our enterprise customers to do development testing on blockchain based applications very rapidly without costing a fortune. So they could do innovative work without risking anything."

Microsoft's long view is that blockchain will be extremely important but it's not the only game in town. "Our enterprise customers can't build their entire business on blockchain. You are going to need CRM systems, you are going to need productivity systems, you are going to need relational database systems. These aren't going away. These still have to work. We want to support the blockchain and bring it into the fold, like for example big data."

Regarding the blockchain Azure service announcement, Gray said: "We have had conversations and we are having conversations with everyone. There is tremendous interest. Early feedback from enterprise customers we have talked to say this is exactly what they were looking for.

"Private blockchains are going to happen and there's going to be more of them. There will be multiple private blockchains. Will it all settle on one stack? I don't know, but there is probably a significant business in gateways and routers between these smart contracts."

In terms of other blockchain providers like Symbiont, Counterparty or Chain, Gray again said Microsoft is talking with all of the players in the space. Regarding the R3 initiative, which has signed up some 25 leading banks to bring about common blockchain protocols, Gray said: "We have been in talks. No comment at this stage. Watch this space."

Microsoft has shown a public commitment to crypto going back to 2014 when it began accepting bitcoin for Xbox content. Now it can offer private and semi-private or consortium blockchain networks, as well as public Ethereum nodes with a single click on Azure. This initial offering comes with tools such as Ether.Camp, a blockchain explorer for Ethereum and BlockApp's full stack app and blockchain builder, Strato.

BlockApps

IBTimes also had a sit down with the BlockApps team and talked about what they might have asked Microsoft. Unsurprisingly, their suggested questions were better than mine.

Victor Wong, BlockApps CEO, said: "I think the big question is how they see the potential of this technology. I think that Microsoft has been dominant in the last generation of technology, and they kind of missed mobile a little bit, so how do they see the entrance into this - is it a way to leapfrog the other competitors at this point?

"Also, we tend to see the Microsoft ecosystem from the point of view of consumers. But they have a huge development community. It's just massive. So how do they see these type of new blockchain services being deployed to that community?"

Dr. Ryan Reich, Haskell & API developer, said: "How do they see blockchain technology changing the way companies on Azure are going to work? You have some established companies which are getting on Azure and they are using very high capacity machines maybe, and then you have possibly startups like ourselves getting on Azure - of course we are providing the blockchain but still - those people will be building up their businesses rather than running something which exists on a legacy system. You should ask Microsoft what they think the blockchain is doing for the people who are coming to Azure because of it."

Kristoffer Josefsson, blockchain geometer said: "I would phrase the question in reverse too. What struck me on Microsoft's presentation was that it's a huge ecosystem of very interesting services that I think most people from the Ethereum background are not aware of or proficient in.

"We were given, for example, a bunch of Azure credits so that we could experiment with the platform; we ended up not using this because all we know what to do is deploy a Linux server and you know, hope that it scales. But then you see that there's machine learning, there's logging, all kinds of like database functionality and a lot of other things which I don't know about.

"It struck me in this presentation - what happens if you plug to all those services and just use Ethereum as a minor component. I think that's a totally unexplored area. And this might actually accelerate the integration of Ethereum a lot."

Dr. James Hormuzdiar, CTO said: "You have Windows 10 IoT on a Raspberry Pi - you get a free installation of windows, so it's a very light embedded version of Windows. Now what happens with that compute unit if it has an Ethereum component?"

Kieren James-Lubin, chief data scientist said: "Micro services is sort of a new idea. I mean it used to be pretty monolithic, you are pretty much getting one server or replicated server. But now it's sort of like you could take a particular route and then a sub-route would actually forward the request. That would be a whole separate machine, and that's kind of what Azure is like and all these cloud services are bringing to the table.

"Ethereum doesn't feel like that yet. We are trying to make it out of a bunch of little pieces that you can wire together in a similar way, and wouldn't matter which machine it's on. So I think it's super exciting. Before we didn't really have the resources to even investigate this tech."